Fair Trade: Impact on Global Poverty and Consumer Behavior
Fair Trade: Impact on Global Poverty
Fair trade: The way in which Western countries trade with poorer nations affects their standard of living and, in many cases, keeps people in poverty. If we changed the rules of trade to be fair, we could improve the lives of millions of people.
Fair Trade is an organized social movement and a market-based approach to helping producers in developing countries earn a fair amount of money for their work. It also tries to support sustainability.
Fair Trade History
Read MoreKeynesian Economics, New Deal, and Post-War Economic Concepts
Keynesian Proposal
Keynes’ diagnosis of the 1929 crisis identified the main problem as a lack of demand leading to the economic collapse of investment. Faced with the decline of private investment, he proposed that the state should increase public spending, mainly on public works. The deficit generated if state spending increased would be offset because this initial expenditure would create new demand (the Keynesian multiplier). Thus, to increase total production, the state could increase taxes on
Read MoreKey Concepts in Economics: From Principles to Market Dynamics
Positive and Normative Economics
Positive Economics
Deals with describing, explaining, or predicting economic phenomena. It is objective and fact-based, where statements can be tested and validated.
Normative Economics
Concerns what ought to be in the economy. It is subjective and value-based, often involving policy prescriptions and opinions.
Definition of Economics
Paul Samuelson
Defined economics as the study of how societies use scarce resources to produce valuable commodities and distribute them among
International Trade: Principles, Advantages, and Protectionism
Fundamentals of International Trade
Item 13: Fundamentals of International Trade. International trade is not different from the trade that occurs within the borders of a state, nation, or region. The use of different currencies leads to foreign exchange, which also creates a market for trading foreign currency. Similarly, foreign trade transactions are recorded in a document called the balance of payments. The main rationale is derived from the distribution of productive factors. Some countries have
Read MoreKey Concepts in Economics: Foundations and Principles
Economics: The Five Foundations
The five foundations of economics are: Incentives, Trade-offs, Opportunity cost, Marginal thinking.
Trade Creates Value
The principle that trade creates value.
MB = MC Rule
Marginal decision rule: You should engage in any activity so long as the MB > MC. The optimal level of activity is where MB = MC. When MC > MB, you should not undertake the activity.
Production Possibility Frontier (PPF)
In macroeconomics, the production possibility frontier (PPF) represents the
International Trade and Business: Benefits and Barriers
Chapter 3: International Trade and Business
Why Do Firms Engage in International Trade?
Firms engage in international trade to:
- Increase sales and find new markets
- Increase diversification of products
- Utilize excess capacity
- Increase revenue and profit
- Become a stronger competitor in the domestic market
Essentially, firms engage in international trade for the same reasons they engage in domestic trade: to expand their profits and business.
Principal Restrictions on a Nation’s Imports
The principal restrictions
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